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    Figuring Cost Driver Rates

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    2 Questions based the information below:

    Rope Company has two departments: Machining and Assembly. The following estimates are for the company yesr:

    Machining Assembly
    Direct Labor hours 10,000 50,000
    Machine hours 40,000 20,000
    Support costs 200,000 400,000

    1) A single predetermined cost driver rate based on total plant direct labor hours is which of the following based on the above information

    $8 per direct labor hour, $10 per direct labor hour, $20 per direct labor hour, or none of these

    2) A predetemined cost driver rate for the Machining department based on the number of machine hours in that department is based on the above info

    $5 per machine hour, $10 per machine hour, $20 paer machine hour, or none of these

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    https://brainmass.com/business/management-accounting/figuring-cost-driver-rates-34257

    Solution Preview

    1) the total plant Support cost is TC = 200,000 + 400,000 = 600,000
    While the total plant direct labor hours is
    L = Machining Direct Labor hours + Assembly Direct Labor hours = 10,000 ...

    $2.49

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